"Despite the challenges impacting the U.S. generics industry, Endo delivered solid operating results in 2017, including strong adjusted EBITDA generation," said Paul Campanelli, President and CEO of Endo. "Importantly, those core areas of focus where we continue to invest outperformed in 2017, as Sterile Injectables and Branded Specialty Products both achieved double-digit growth. We enter 2018 leaner and better positioned for the future, and the year has already been marked by a pivotal event. Earlier this month, we began our Phase 3 clinical trials of CCH for the treatment of cellulite. We view this as a major milestone for a new and important potential growth driver for our Company."

FINANCIAL PERFORMANCE

(in thousands, except per share amounts)

Three Months Ended December 31,

Year Ended December 31,

2017

2016

Change

2017

2016

Change

Total Revenues

$

768,640

$

1,241,513

(38)

%

$

3,468,858

$

4,010,274

(14)

%

Reported Loss from Continuing
Operations

$

(271,581)

$

(3,333,325)

(92)

%

$

(1,232,711)

$

(3,223,772)

(62)

%

Reported Diluted Weighted Average
Shares

223,322

222,870

—

%

223,198

222,651

—

%

Reported Diluted Loss per Share
from Continuing Operations

$

(1.22)

$

(14.96)

(92)

%

$

(5.52)

$

(14.48)

(62)

%

Adjusted Income from Continuing
Operations

$

173,863

$

395,791

(56)

%

$

860,361

$

1,054,382

(18)

%

Adjusted Diluted Weighted Average
Shares1

224,577

223,178

1

%

223,978

223,090

—

%

Adjusted Diluted EPS from
Continuing Operations

$

0.77

$

1.77

(56)

%

$

3.84

$

4.73

(19)

%

__________

(1)

Diluted per share data is computed based on weighted average shares outstanding and, if there is income from continuing operations during the period, the dilutive impact of share equivalents outstanding during the period. In the case of Adjusted Diluted Weighted Average Shares, Adjusted Income from Continuing Operations is used in determining whether to include such dilutive impact.

CONSOLIDATED RESULTS

Total revenues decreased by 38 percent to $769 million in fourth-quarter 2017 compared to the same period in 2016. The decline was primarily due to the loss of marketing exclusivity in the first half of 2017 for the first-to-file U.S. Generic Pharmaceuticals products ezetimibe tablets, the generic version of ZETIA®, and quetiapine extended-release (ER) tablets, the generic version of SEROQUEL XR®, both of which launched in fourth-quarter 2016. Also contributing to the decline in total revenues were previously announced U.S. Generic Pharmaceuticals product discontinuances, pricing pressure from increased competition primarily impacting the U.S. Generics Base business, the divestitures of Litha and Somar, as well as the cessation of OPANA® ER shipments to customers by September 1, 2017.

GAAP net loss from continuing operations in fourth-quarter 2017 was $272 million compared to GAAP net loss from continuing operations of $3,333 million during the same period in 2016. This decrease included the impact of lower asset impairment charges and intangible asset amortization in fourth-quarter 2017. GAAP diluted net loss per share from continuing operations for fourth-quarter 2017 was $1.22, compared to GAAP diluted net loss per share from continuing operations of $14.96 in fourth-quarter 2016.

Adjusted income from continuing operations in fourth-quarter 2017 was $174 million compared to $396 million in fourth-quarter 2016. This decrease resulted primarily from lower revenues of ezetimibe tablets, quetiapine ER tablets, Base business generic products and OPANA® ER as well as an increase in interest expense, mainly due to the refinancing of the Company's secured debt in April 2017, which enhanced operational flexibility and extended the Company's maturity schedule. Adjusted diluted EPS from continuing operations in fourth-quarter 2017 was $0.77 compared to $1.77 in fourth-quarter 2016.

U.S. GENERIC PHARMACEUTICALS

During fourth-quarter 2017, the U.S. Generic Pharmaceuticals segment launched six products and submitted two regulatory filings. In 2017, the U.S. Generic Pharmaceuticals segment launched 17 new generic products and the Company made 12 regulatory submissions. As of December 31, 2017, the Company had approximately 100 Abbreviated New Drug Applications pending with the U.S. Food and Drug Administration.

Fourth-quarter 2017 U.S. Generic Pharmaceuticals results include:

Revenues of $499 million, a 43 percent decrease compared to fourth-quarter 2016; this decline was primarily attributable to the loss of marketing exclusivity in the first half of 2017 for the first-to-file products ezetimibe tablets and quetiapine ER tablets. Also contributing to the decline were previously announced product discontinuances and pricing pressure from increased competition primarily impacting the Base business.

New Launches and Alternative Dosages revenue decreased 67 percent compared to fourth-quarter 2016; this decrease was driven primarily by the expiration of the marketing exclusivity periods for ezetimibe tablets and quetiapine ER tablets.

The U.S. Generics Base business revenues decreased 37 percent compared to fourth-quarter 2016; this decrease primarily resulted from the impact of 2016 and 2017 competitive events, previously announced product discontinuances and the continued impact of pricing due to consolidation among our trade accounts.

U.S. BRANDED PHARMACEUTICALS

In February 2018, Endo announced the initiation of two Phase 3 clinical trials of collagenase clostridium histolyticum (or "CCH") for the treatment of cellulite.

Fourth-quarter 2017 U.S. Branded Pharmaceuticals results include:

Revenues of $228 million, a 21 percent decrease compared to fourth-quarter 2016; this decrease was primarily attributable to the decline in revenues of OPANA® ER resulting from the cessation of product shipments by September 1, 2017 and generic competition adversely impacting the Company's Established Products portfolio.

Specialty Products revenues increased 8 percent in fourth-quarter 2017 versus the same period in 2016, driven by strong performance from XIAFLEX® and other products within our Specialty Products portfolio. Sales of XIAFLEX®, our flagship Branded product, increased 10 percent compared to fourth-quarter 2016; this increase was primarily attributable to volume growth that was driven, in part, by a full year of direct-to-consumer initiatives intended to increase patient awareness of XIAFLEX® as a possible treatment option for Dupuytren's Contracture and Peyronie's Disease.

INTERNATIONAL PHARMACEUTICALS

Fourth-quarter 2017 International Pharmaceuticals revenues were $41 million, compared to $70 million in the same period in 2016. The decline is primarily attributable to the sale of the Company's South African Litha business to Acino Pharma AG, which closed on July 3, 2017, and the sale of the Company's Mexican Somar business to Advent International, which closed on October 25, 2017.

2018 FINANCIAL GUIDANCE

For the full twelve months ending December 31, 2018, at current exchange rates, Endo is providing guidance on revenue, adjusted diluted EPS from continuing operations and adjusted EBITDA from continuing operations. The Company estimates:

Total revenues to be between $2.6 billion and $2.8 billion;

Adjusted diluted EPS from continuing operations to be between $2.15 and $2.55; and

Adjusted EBITDA from continuing operations to be between $1.2 billion and $1.3 billion.

The Company's 2018 non-GAAP financial guidance is based on the following assumptions:

Adjusted gross margin of approximately 67.0% to 68.0%;

Adjusted operating expenses as a percentage of revenues of approximately 25.5% to 26.5%;

Adjusted interest expense of approximately $530 million to $540 million;

Adjusted effective tax rate of approximately 11.0% to 12.0%; and

Adjusted diluted weighted average shares outstanding of approximately 226 million.

BALANCE SHEET, LIQUIDITY AND OTHER UPDATES

As of December 31, 2017, the Company had $987 million in unrestricted cash; debt of $8.3 billion; net debt of approximately $7.3 billion and a net debt to adjusted EBITDA ratio of 4.6.

Fourth-quarter 2017 cash provided by operating activities was $132 million, compared to $84 million of net cash provided by operating activities in the comparable 2016 period. The 2016 period was impacted by higher payments related to U.S. mesh product liability claims.

During fourth-quarter 2017, the Company recorded pre-tax, non-cash asset impairment charges of $130 million, $126 million of which related to in-process research and development and developed technology intangible assets in its U.S. Generic Pharmaceuticals segment.

In addition, the Company recorded a total increase of approximately $200 million to its legal reserves relating to both LIDODERM® antitrust matters and Testosterone Replacement Therapy (TRT) product liability matters after determining that a loss is probable and reasonably estimable. The LIDODERM® portion of the reserve increase includes an estimated loss for, among other matters, a settlement in principle of all remaining claims filed against the Company's subsidiary, Endo Pharmaceuticals Inc., in In re Lidoderm Antitrust Litigation, MDL No. 2521, pending in the U.S. District Court for the Northern District of California. The TRT portion of the reserve increase includes an estimated loss for, among other matters, all testosterone-related product liability cases filed against the Company's subsidiaries in In Re Testosterone Replacement Therapy Products Liability Litigation, MDL No. 2545, pending in the U.S. District Court for the Northern District of Illinois, and in other courts. In February 2018 the court in MDL No. 2545 entered a case management order reporting that the parties had entered into a memorandum of understanding regarding a potential global settlement and directing that all proceedings involving the Company's subsidiaries be temporarily stayed so that the parties may devote their efforts to finalizing a master settlement agreement.

CONFERENCE CALL INFORMATION

Endo will conduct a conference call with financial analysts to discuss this press release today at 7:30 a.m. ET. The dial-in number to access the call is U.S./Canada (866) 497-0462, International (678) 509-7598, and the passcode is 4978556. Please dial in 10 minutes prior to the scheduled start time.

A replay of the call will be available from February 27, 2018 at 10:30 a.m. ET until 10:30 a.m. ET on March 2, 2018 by dialing U.S./Canada (855) 859-2056, International (404) 537-3406, and entering the passcode 4978556.

The following table presents Endo's unaudited Total Revenues for the three and twelve months ended December 31, 2017 and 2016 (in thousands):

Three Months Ended December 31,

Percent

Year Ended December 31,

Percent

2017

2016

Growth

2017

2016

Growth

U.S. Generic Pharmaceuticals:

U.S. Generics Base

$

182,314

$

288,142

(37)

%

$

829,729

$

1,230,097

(33)

%

Sterile Injectables

167,342

143,905

16

%

654,270

530,805

23

%

New Launches and Alternative Dosages

149,396

450,127

(67)

%

797,002

803,711

(1)

%

Total U.S. Generic Pharmaceuticals

$

499,052

$

882,174

(43)

%

$

2,281,001

$

2,564,613

(11)

%

U.S. Branded Pharmaceuticals:

Specialty Products:

XIAFLEX®

$

61,265

$

55,530

10

%

$

213,378

$

189,689

12

%

SUPPRELIN® LA

22,743

20,793

9

%

86,211

78,648

10

%

Other Specialty (1)

39,977

38,243

5

%

153,384

138,483

11

%

Total Specialty Products

$

123,985

$

114,566

8

%

$

452,973

$

406,820

11

%

Established Products:

OPANA® ER

$

1,770

$

38,880

(95)

%

$

83,826

$

158,938

(47)

%

PERCOCET®

32,048

36,029

(11)

%

125,231

139,211

(10)

%

VOLTAREN® Gel

15,134

18,612

(19)

%

68,780

100,642

(32)

%

LIDODERM®

13,924

21,122

(34)

%

51,629

87,577

(41)

%

Other Established (2)

41,514

60,087

(31)

%

175,086

273,106

(36)

%

Total Established Products

$

104,390

$

174,730

(40)

%

$

504,552

$

759,474

(34)

%

Total U.S. Branded Pharmaceuticals (3)

$

228,375

$

289,296

(21)

%

$

957,525

$

1,166,294

(18)

%

Total International Pharmaceuticals

$

41,213

$

70,043

(41)

%

$

230,332

$

279,367

(18)

%

Total Revenues

$

768,640

$

1,241,513

(38)

%

$

3,468,858

$

4,010,274

(14)

%

__________

(1)

Products included within Other Specialty include TESTOPEL®, NASCOBAL® Nasal Spray, and AVEED®.

(2)

Products included within Other Established include, but are not limited to, TESTIM® and FORTESTA® Gel, including the authorized generic.

(3)

Individual products presented above represent the top two performing products in each product category and/or any product having revenues in excess of $25 million during any quarterly period in 2017 or 2016. LIDODERM® is separately presented as its revenues exceeded $25 million in certain quarterly periods in 2016.

The following table presents unaudited Condensed Consolidated Statement of Operations data for the three and twelve months ended December 31, 2017 and 2016 (in thousands, except per share data):

CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH
EQUIVALENTS, END OF PERIOD

$

1,311,014

$

805,180

SUPPLEMENTAL FINANCIAL INFORMATION

To supplement the financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), the Company uses certain non-GAAP financial measures. For additional information on the Company's use of such non-GAAP financial measures, refer to Endo's Current Report on Form 8-K furnished today to the Securities and Exchange Commission, which includes an explanation of the Company's reasons for using non-GAAP measures.

The tables below provide reconciliations of certain of our non-GAAP financial measures, both historical and forward-looking, to their most directly comparable GAAP amounts. Refer to the "Notes to the Reconciliations of GAAP and Non-GAAP Financial Measures" section below for additional details regarding the adjustments to the non-GAAP financial measures detailed throughout this Supplemental Financial Information section.

Reconciliation of EBITDA and Adjusted EBITDA (non-GAAP)

The following table provides a reconciliation of Net loss attributable to Endo International plc (GAAP) to Adjusted EBITDA (non-GAAP) for the three and twelve months ended December 31, 2017 and 2016 (in thousands):

Three Months Ended December 31,

Year Ended December 31,

2017

2016

2017

2016

Net loss attributable to Endo International plc (GAAP)

$

(368,417)

$

(3,337,856)

$

(2,035,433)

$

(3,347,066)

Income tax benefit

(152,776)

(72,277)

(250,293)

(700,084)

Interest expense, net

126,961

111,783

488,228

452,679

Depreciation and amortization (18)

177,321

260,370

857,706

955,802

EBITDA (non-GAAP)

$

(216,911)

$

(3,037,980)

$

(939,792)

$

(2,638,669)

Inventory step-up and other cost savings (2)

$

109

$

13,912

$

390

$

125,699

Upfront and milestone-related payments (3)

2,531

2,455

9,483

8,330

Inventory reserve increase (decrease) from restructuring (4)

5,779

(137)

13,678

24,455

Royalty obligations (5)

—

—

—

(7,750)

Separation benefits and other restructuring (6)

78,692

37,216

198,770

83,036

Certain litigation-related and other contingencies, net (7)

200,006

(4,765)

185,990

23,950

Asset impairment charges (8)

130,446

3,518,085

1,154,376

3,781,165

Acquisition-related and integration costs (9)

—

8,356

8,137

63,778

Fair value of contingent consideration (10)

26,375

(956)

49,949

23,823

Loss on extinguishment of debt (11)

—

—

51,734

—

Share-based compensation

9,897

15,183

50,149

58,656

Other income, net (19)

(6,180)

(740)

(17,023)

(338)

Other adjustments

(151)

781

(226)

—

Discontinued operations, net of tax (15)

96,836

4,531

802,722

123,278

Net income attributable to noncontrolling interests (16)

—

—

—

16

Adjusted EBITDA (non-GAAP)

$

327,429

$

555,941

$

1,568,337

$

1,669,429

Reconciliation of Adjusted Income from Continuing Operations (non-GAAP)

The following table provides a reconciliation of our Loss from continuing operations (GAAP) to our Adjusted income from continuing operations (non-GAAP) for the three and twelve months ended December 31, 2017 and 2016 (in thousands):

Three Months Ended December 31,

Year Ended December 31,

2017

2016

2017

2016

Loss from continuing operations (GAAP)

$

(271,581)

$

(3,333,325)

$

(1,232,711)

$

(3,223,772)

Non-GAAP adjustments:

Amortization of intangible assets (1)

158,276

240,390

773,766

876,451

Inventory step-up and other cost savings (2)

109

13,912

390

125,699

Upfront and milestone-related payments (3)

2,531

2,455

9,483

8,330

Inventory reserve increase (decrease) from restructuring (4)

5,779

(137)

13,678

24,455

Royalty obligations (5)

—

—

—

(7,750)

Separation benefits and other restructuring (6)

78,692

37,216

198,770

83,036

Certain litigation-related and other contingencies, net (7)

200,006

(4,765)

185,990

23,950

Asset impairment charges (8)

130,446

3,518,085

1,154,376

3,781,165

Acquisition-related and integration costs (9)

—

8,356

8,137

63,778

Fair value of contingent consideration (10)

26,375

(956)

49,949

23,823

Loss on extinguishment of debt (11)

—

—

51,734

—

Non-cash and penalty interest charges (12)

—

—

—

4,092

Other (13)

(7,487)

(1,836)

(8,620)

(7,273)

Tax adjustments (14)

(149,283)

(83,604)

(344,581)

(721,602)

Adjusted income from continuing operations (non-GAAP)

$

173,863

$

395,791

$

860,361

$

1,054,382

Reconciliation of Other Adjusted Income Statement Data (non-GAAP)

The following tables provide detailed reconciliations of various other income statement data between the GAAP and non-GAAP amounts for the three and twelve months ended December 31, 2017 and 2016 (in thousands, except per share data):